Ulrich Steinmetz, RREEF

RREEF Real Estate is the real estate investment business of Deutsche Asset Management. With approximately €45 billion of assets under management worldwide, RREEF has offices in New York, San Francisco, Frankfurt, Paris, London, Hong Kong, Tokyo and Singapore. Managing Director Ulrich Steinmetz spoke to Leon Goldwater about RREEF’s current and future activities.

What are your responsibilities at RREEF?

"I am responsible in Germany for the two open-ended funds, grundbesitz europa and grundbesitz global, which have approximately €5.6 billion assets under management. In the last couple of months I was involved in acquisitions and dispositions for both funds, whereby we have purchased and sold about €1 billion of properties all over the world."

What is your investment focus?

"Traditionally we focus on the core sector, as we have been doing for the last 50 years for these two funds. Other parts of RREEF are also investing in opportunistic or value-add assets, but the business I am in is very much in the core sector. Consequently, based on our current sectorial and geographic allocation, we have concentrated in investing in Europe, especially in Germany and selectively in London and in Paris, as well as in Poland and the Nordics. Our investment focus is driven by markets, but also by the allocation of the fund. Globally we are looking at North America, but we are also disposing in Asia, in Europe, in order to make a more global portfolio and modern portfolio.

"In Asia, we have focused mostly in Japan. We have also looked at other countries, but we have not found the right investments. I think currently there are good opportunities to invest in Japan, which from our point of view is currently at a stage where one should really start making investments. The rents are either at the bottom or bottoming out in the next 12 months so the investment market is quite interesting.

"As for Eastern Europe, we are only concentrating on Poland and the Czech Republic. As you probably have heard from many of our peers, these are the two countries which make sense from an economic point of view right now, while we are looking to a lesser extent at the eastern countries. However, being a core investing fund, we normally would not look into Russia or Romania and I think that this is not going to change in the foreseeable future."

What will be your focus in the year to come?

"We will be very interested in North America for the global investing fund, because we think that the US market is still interesting and has potential for growth. We still think that Japan is a good place to invest for the next 18 months or so, but one should be a little more careful in the other markets. Singapore for example is a very volatile market, so we wouldn’t invest there today; China also seems to be interesting, however the lot sizes of investment are pretty big in Beijing and Shanghai and therefore it may be difficult to invest there."

What makes RREEF stand out from the competition?

"I think it’s the global platform, the fact that we have offices all over the world, in combination with local expertise. We are a multicultural company and we have local people everywhere, who are not only experts in the real estate markets, but also in the country’s culture. From my experience, for a global investor it’s very important to understand the culture, to understand how to communicate and negotiate in the best possible way. Our people have the local knowledge of the Real Estate Market and have the respective relationships to its participants. That is very important these days because the regulations that are changing have an impact on the real estate environment.

"Another important advantage from my point of view is that we are active portfolio managers. We are not buying and holding, we also check every single year which assets really perform for the fund and for the investors and which properties not and therefore have to be sold. I think that’s a big advantage. We have proven over the past years that we were able to stay active in a market cycle that has not been easy. If you look at 2009 nothing important happened, but we were still disposing and buying assets. I think that is the big advantage of our company and its employees."

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